Truman Seman, a principal with GreenOrder, a New York-based consulting firm specializing in sustainability, said the "tremendous investment and innovation" happening in the absence of coherent carbon policy is a sliver of the market's potential. "There would be much, much more if we had clear rules," he said. "The biggest barrier to significant economic advancement is securing clear climate policy in the US."
Mr. Seman is talking about the crucial interplay between private investment and government policy. The interaction between the two is starkly different when looking at clean tech versus dirty energy. Anyone familiar with the 2005 attempted acquisition of Unocal by the Chinese firm CNOOC should be fully aware of growing role the federal government plays in global energy markets. This is a future we want to avoid. The funny thing is, it was congressional Republicans in 2005 who blocked the acquisition in favor of CNOOC's competition, Chevron. In short, congressional Republicans interfered with the market to favor an American company. As world oil production peaks, probably within the next five years, we can expect more and more state influence in private business transactions by the US, Russia, India, China, Japan and Europe.
This messy, conflict-ridden future is the most likely scenario if we do not pass a climate-energy bill. An ideal bill would raise revenues by finally setting a price on carbon and invest in making clean energy cheaper and more broadly available. Instead of the federal government fighting geopolitical battles over coal, oil and natural gas, let's have the federal government guide our researchers and entrepreneurs towards an energy future not fraught with war, energy insecurity and global depression.
"Anyone familiar with the 2005 attempted acquisition of Unocal by the Chinese firm CNOOC should be fully aware of growing role the federal government plays in global energy markets. This is a future we want to avoid."
ReplyDeleteAs far as I understand it, the CNOOC acquisition could have pushed us closer to more government involvement in the long run. CNOOC is 70% owned by the Chinese government, and had they acquired Unocal, I could very easily see a huge amount of government involvement from both sides of the pacific.
Ironically, my possible disagreement with your stance on the Unocal acquisition (I'm uncertain what your stance is on that intervention. It largely SEEMS negative, but I am a little uncertained...) leads me to agree heavily with your overall point of having clearly defined policy. The problem of course, is what that actual policy should be...
Thoughts?
The CNOOC-Unocal deal is largely an anecdotal indication of the direction we might be headed in. China, as you mentioned, is already well ahead of us on that path, but their state has a much bigger controlling stake in the their economy than the US already.
ReplyDeleteAnd yes, moving forward from a policy perspective is much more complicated than "AVOID CNOON-UNOCAL TYPE STUFF." But as a general rule, I think it's wise to foster innovation and decentralization as central tenets of energy policy.